module01 - Module 1: The assurance process Overview Your...

Module 1: The assurance process Overview Your study of assurance services in AU2 focuses on the audit of financial statements: you develop a clear understanding of how assurance services are performed and why they are necessary. Module 1 provides historical context and builds on basic auditing concepts you are already familiar with. You learn about recent changes in the environment of public accounting practice, particularly in auditing, and recognize their impact on the roles and responsibilities of the auditor. You also review introductory concepts such as the general framework for assurance engagements; the interrelationship between assurance standards, rules of professional conduct, and ethics (including the CGA-Canada Independence Standard ); and the audit process and the audit risk model. Through multimedia activities, you practise applying professional ethical standards and protecting the public interest — two important responsibilities of a CGA. Case problems can help you practise the skills needed to deal with ethical issues in conducting an audit. Review the nine-step approach to case analysis, presented in " How to analyze a case ". You will have an opportunity to practise this approach in the self-test. When you have completed this module, you should have a good background knowledge of assurance engagements and the context in which auditors currently operate. This foundation will support you in the exercises in later modules. Finally, through your study of auditing concepts and the assurance framework, you should feel more confident in your ability to apply your technical assurance skills and more general problem-solving skills to auditing issues. (Note that the module mentions CICA Handbook sections that you will study later in the course.) Test your knowledge Begin your work on this module with a set of test-your-knowledge questions designed to help you gauge the depth of study required. Learning objectives 1.1 Identify the ways information risk arises and the reasons why assurance services are considered to be a value-added activity. (Level 1) 1.2 Explain the expectation gap and how the profession is trying to bridge it. (Level 2) 1.3 Discuss the meaning and importance of auditor independence and the threats to it, and identify the safeguards available to either eliminate these threats or reduce them to an acceptable level. (Level 1) 1.4 Describe an assurance engagement and how the assurance framework is applied. (Level 1) 1.5 Outline the proposed changes to the structure of Canadian auditing standards as a result of the adoption of the Canadian Standards on Auditing (CASs). (Level 2) 1.6 Apply the ethical principles, codes, and rules relating to association with information and professional conduct. (Levels 1 and 2) 1.7 Describe the audit risk model and how it is used to guide auditors in determining the nature, extent, and timing of substantive audit procedures. (Level 1) AU2 - Module 1 Page 1

This preview
has intentionally blurred sections.
Sign up to view the full version.